$500 a year cash boost coming for working parents

WORKING parents will secure a $500-a-year cash boost to Family Tax Benefits under a major concession designed to break a Senate deadlock.

In a major back down designed to secure Senate support for the childcare package the Turnbull government will also walk away from plans to reduce Family Tax Benefit B payments for families when their youngest child is 13.

The Turnbull Government will announce the changes today in a revamped childcare package designed to deliver FTB relief fortnightly instead of a once-a-year supplement.

The back down marks the final chapter in the Abbott and Turnbull Government's attempts to slash middle class welfare by $6 billion.

The winners are 1.2 million families across Australia who will now secure an extra $20 a fortnight in Family Tax Benefit A.

Jonathan Canlas

But the annual $726 FTB A supplement will be abolished with the savings used to increase fortnightly payment by $20 and boost spending on childcare.

Low and middle income families who qualify for Family Tax Benefit A are the big winners under the $500 a year boost.
The changes will boost relief for families by $2.5 billion by 2020.

As previously announced the government will boost the 50 per cent childcare rebate to 85 per cent of out of pocket costs for families earning $65,000 or less.

Low income parents would pay around $15 a day for childcare when the new childcare payments come into effect.

Senior government sources confirmed the backdown after Welfare Minister Christian Porter briefed MPs on elements of the deal.

Documents obtained by Sky News confirmed the $20 a fortnight increase to FTB A from 2018 and the government's backdown on cuts to FTB when families' youngest child turned 13.

The legislation will be introduced into Parliament on Wednesday.

Labor's families spokeswoman Jenny Macklin said the changes were a massive backdown.

But she reserved the right to consider the legislation when before announcing if the backdown was enough to secure Labor's Senate support.

"Tonight's embarrassing leak of expected changes to the family payments system is another blow for Malcolm Turnbull,'' she said.

"Labor has stood side-by-side with Australian families since the 2014 Budget - when the Liberals wanted to cut $6,000 a year from average families. Unlike Malcolm Turnbull, we won't abandon families.''

The Abbott Government first announced the boost to childcare relief as compensation for the decision to scrap Tony Abbott's paid parental leave scheme.

But the government put the proposal on the backburner until the Senate passed a crackdown on family tax benefits.

The impasse means parents will continue to denied childcare relief until the Senate can secure agreement on the FTB changes.